Economics is fundamentally unscientific. The economic crisis has speeded the shift of power to emergent economies. In Britain and the USA the theory of 'rational markets' removed controls from the finance sector, and things can still get yet worse. Read my book, No Confidence: The Brexit Vote and Economics - http://amzn.eu/ayGznkp

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Thursday, 19 March 2015

One rather hopes that politicians always know they are lying, then we know what game they are playing.

But I have an eerie feeling that Gideon our Chancellor of the Exchequer really believes that the basic economic data are favourable for the United Kingdom. He bases this optimism especially on the facts that the Gross National Product is increasing at around 2.5% this year, and that millions of people are doing very low-paid jobs.

Neither of these items is actually good for the economy, or for the people who depend on it.

The gross national product is merely the guesstimated total of transactions in the country: so it is immaterial whether the products that are sold are British made or imported. Provided more is traded at rising prices, or yet more at constant or falling prices, the GNP goes up. So the more people are employed to unpack and to sell imported goods [or to fit imported nail designs] the more GDP and employment go up. But when imports exceed imports by more than 6% of the total national income, as now, that means that a sum equal to 6% of the total reported turnover is owed to foreign producers.
This deficit must be clocked up as additional external debt - on which we have to pay interest - or used by foreign investors to buy yet more control of British companies [whose customers thereafter have to pay tribute to the foreign owners of those businesses]; or dwellings in London that are mostly unoccupied. Either way, in addition to buying more than we import, we have to pay more every year for what was borrowed or sold out in the past. So every increment in the GNP at present increases the country's indebtedness to aliens.

In addition, much of the purchase money for imported goods is borrowed within the UK: so private debt is increasing. Private debt is further increased as people borrow to fund house purchases at rising prices. Increasing proportions of exiguous wages are dedicated to debt servicing, and every added restriction on lending to the poor further reduces their aspirations to enjoy anything like the lifestyle they see others enjoying on the telly.

Furthermore, as had been emphasised by all opposition politicians [including today the LibDems], the national debt to fund government spending within the UK has increased under Gideon's supposedly brilliant custodianship.

So personal debt is up, domestic national debt is up, and debt to aliens is up: and the net result of five years of deleterious reductions of many public services is a disaster. Of course, some areas of government were ineffective and inefficient: so austerity in those areas served the taxpayer well; but the overall net result of cutbacks in the public sector has done nothing to mitigate the economic scene while it has notably devastated the social system.

If it were not so ruinous to the economy in the medium term, one could merely lament Gideon's adherence to the nonsense Economics that he was taught as a student. But as it is so utterly devastating, his delusion will not save him from a reckoning.

Tuesday, 10 March 2015

The barristers are in a tizz because they recognise that the pattern of available work is being changed by the reckless policy of cuts being imposed by the government. In particular, they argue this week that the severe reduction in the availability of legal aid for civil cases [cases brought by one person or business against another] has almost completely been removed from smaller-value cases. This means that neither side can afford to employ a barrister to take the case to court: and the barrister profession as such calls this a denial of 'justice' to the litigants.

I can have no sympathy with them, as long as they harbour in their midst the sort of despicable character that attempts, in court, to blacken the characters of abused children as a form of mitigation for the appalling abuse that the defendants have undeniably committed. A recent case in Oxford Crown Court was darkened still further by the fact that one of the barristers who used this defence was a woman. This disgrace to the human race was defending in a criminal case, so her remuneration was provided by the taxpayer. While this is considered by the Bar Council to be acceptable conduct, the population should display utter contempt for the entire profession. Of course the tenants of the most expensive chambers in the Temple would never take such cases, and thus would not be tempted to use scurrilous tactics; but they do not act to elevate their lesser brethren from the mire in which they choose to wallow.

The sooner Britain's outrageous confrontational courts system is abolished, the better!

Wednesday, 4 March 2015

The Chancellor is greatly pleased with himself: he has been to some degree instrumental in selling the government's block of Eurostar shares. Of course, a major tranche of those shares are allocated to a Canadian pension fund. The rest goes to equity investors who will either sell to aliens or sell to Brits who will, in due course, sell to aliens.

He purports to believe that such actions are good for the country. They bring in cash, which he can waste on bread and circuses for the masses. Then the foreigners own the assets, and we don't.

This is just a tiny example of the gadarene rush to despoil the country of its remaining assets. Each such sale pumps a bit of cash into the country, until in the course of circulation it is used to buy imports: then the consumption of those imports is the final destruction of the wealth that was alienated when the capital assets [including, in many cases, intellectual property] passes out of British hands.

Sunday, 1 March 2015

The debate that has limped through recent days, largely in the letters columns of the minority press, shows the utter failure of the political class to recognise the constant imperative to maintain the national defences at whatever that may cost. The U K is effectively defenceless against jihadism, and the government (even more, the official opposition) is not willing to contemplate either the cost or the content of building adequate defences. Yet the chattering classes would have their political chums are talking pretty recklessly helping the spivs who run Ukraine finally to suppress - if not expel - the indigenous Russian speaking minority; who number several million. Whatever the weaknesses of the official Uranian army, the tough nut volunteers (notably the Azov brigade) are determined racists who want to wreak upon Russian speakers their vengeance for the horrors perpetrated on the country by the Georgian tyrant who called himself Stalin.

Retired generals, admirals and Air Marshals have battened onto the slogan that the UK should spend 2 % of GDP on Defence. That is nonsense: the country should spend what is necessary, thus generating employment and spin-off technology.

In the nineteen-naughties Germany started to build 'super-Dreadnoughts' . This alarmed the establishment of then-patriotic and intelligent people. HMS Dreadnought had been designed to put the Royal Navy ahead of all comers, but the Germans could copy it and their construction programme could enable them to pull ahead of Britain. So the cry went out "We want eight, and we won' t wait" and we built eight of these things every year until we outnumbered Germany' fleet. Nobody counted cost before national security: the money had to be found!

The country has effectively been stripped of defensive capability ; and, even more worryingly, of any willingness openly to face the fact.

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About Me

I have had a very fortunate life, in that I have been able to study the economy and Economics for more than forty years. I taught Economics, the History of Economic Thought and some Economic History at University level for over twenty years; I was CEO of an international professional Institute in financial services for more than a decade; served as head of a large Business School and have been Pro-Vice-Chancellor of a major university; and I have lectured and examined all over the world. My introductory text on insurance was translated into fourteen languages and my writings over a wide range of topics have been available worldwide.

Throughout these years I have quietly challenged the normative assumptions that underlie academic Economics; but for decades I recognised that the hegemony of dogma was so impenetrable that any frontal assault on the self-styled ‘profession’ would be brushed aside by the professoriate that had been appointed in a pyramid of patronage. Now – through the credit crunch and the even more grave sovereign debt crisis – it is very widely recognised that Economics is a failed subject: it fails to provide any adequate analysis of the situation or any new programme for moving the economy forward. The time has come for the world to understand how fundamental the failings of Economics are.

Fortunately we can begin to move forward in understanding by restating principles that were developed before Economics was set out in its modern form in the eighteen-seventies. A sound understanding of the economy begins in the recognition that all decisions and actions in the economy are taken by human individuals, acting on their own or as the agents of corporate persons [companies, registered charities etc] or as servants of international sovereign persons that are known as states [and their governments, local authorities and state agencies].

Persons are not impotent incidents in markets: markets are the creations of persons and any market can be abused or upset by persons with unusual ambition, drive, inspiration or dishonesty. This approach is followed in my simple little book, Personal Political Economy: follow the link.

In this blog I make comments on people and events from the perspective that is set out in the book: and I will not hesitate to repudiate any portion of the book – or any blog – that is invalidated by emergent reality.I thrive on criticism, and welcome it.